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UAE Legal Update: Regulatory Alert (Healthcare)

Federal Law No.2 of 2019 – Using IT and Telecommunications in the Healthcare Sector

The United Arab Emirates Government Promulgate Federal Law No.2 of 2019 – Using IT and Telecommunications in the Healthcare Sector (“the Law”), which for the first time regulates healthcare data processed, controlled, transferred and stored electronically.

The Law contains 22 Articles, which includes, but is not limited to the creation of a central data base system, obligations in respect of data privacy and use of IT and telecommunication technology when processing, transferring and storing data. In addition, obligations are placed on media licensing, training and violations for breach of the Law.

The Law is unique insofar that it is the first federal privacy law relating to healthcare data and protection of personal and sensitive data in the UAE.

Healthcare providers, insurers, insurance intermediaries, third party medical claims administrators, technology companies in the healthcare space and others dealing with healthcare will need review an audit their current practices and comply with the Law.

The Law is expected to be gazetted in the coming weeks and will be implemented three months from that date.

BSA will provide a follow up detailed analysis of the law in due course.

About BSA Ahmad Bin Hezeem & Associates LLP

BSA is a law firm originally founded in Dubai with the primary mission of delivering top-tier legal services based on our comprehensive knowledge of local, national, and international law.

Since our inception in 2001, we have rapidly expanded to a leading full-service law firm, with offices throughout the Middle East and France. Our lawyers are internationally educated, bi-lingual in languages such as English, Arabic, and French, and dual-qualified in both regional and international jurisdictions, having rights of audience in every country within which we operate.

BSA is a law firm that truly reflects the energy and ambition of the Middle East.

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UAE Insurance Authority Issues list of Administrative Fines

The UAE Insurance Authority (‘IA’) has now promulgated and issued the ‘Cabinet Resolution No 7 of 2019 Concerning the Administrative Fines Imposed by the Insurance Authority’ (‘the Resolution’), which was issued by His Highness Mohammed Bin Rashid Al Makhtoum, the Prime Minister of UAE on 6 January 2019, followed by its publication on the IA’s website earlier this month.

The Resolution applies to all licensed United Arab Emirates (‘UAE’) insurance companies and insurance related professionals such as TPAs and Loss Adjustors, defined in the Resolution as ‘Company’ and ‘Insurance-Related Professionals’ respectively. The Resolution provides an extensive list of violations and administrative fines for breach of the listed violations.

The penalties are far reaching in that UAE insurance providers could be exposed to fines of up to AED two (2) million.  Any fine issued by the Board of the IA can be appealed within 15 days of the publication and the Board shall provide a decision on the appeal within 60 days of filing the appeal.

Historically, the fines and penalties under Federal Law No 6 of 2007 were mostly restricted to licensed entities and left scope for evasion of the penalties. The violations and fines listed in the Resolution are likely to be strictly enforced by the IA. By way of illustration, any entity carrying out re-insurance in UAE without the necessary license from the Authority can now be fined AED 250,000.  Similarly, Representative Offices of foreign insurance companies carrying out their business in UAE without prior approval from the Authority will attract a fine of AED 250,000.

In addition, insurance mediation with a non-licensed UAE insurance company is not permitted and attracts a fine of AED 100,000. Reinsurance and insurance mediation violations within the Resolution provides an interesting interpretation in the context of current UAE reinsurance and insurance mediation operations in the UAE, which might expose insurance providers and their insurance counterparties inadvertently to penalties.

The Resolution comes into force from 6 April 2019 and is significant in terms of the 204 listed violations and the financial costs to the stakeholders of the UAE insurance industry should they not correct their regulatory position within 5-6 weeks.

Many UAE insurance providers will need to audit their regulatory position including meeting the UAE solvency obligations under the UAE Financial Regulations as well as their operational and distribution requirements in order to avoid risk of violating the provisions of the Resolution.

Insurance providers should carefully review the provisions of the Resolution and the attached Schedule to correct any violations or potential violations to avoid costly and unnecessary penalties.  No upper limit has been prescribed for the fines, nor are there any provisions for compounding of the fine, perhaps suggesting that the fines will be multiplied by the number of times the violation occurred.